Zimbabwe banks to lose millions after court ruling on debts

Zimbabwean banks are set to lose millions after the Supreme Court ruled Tuesday that debts incurred before last February should be settled in the local currency at a rate at par with the greenback.

Chief Justice Luke Malaba

On February 22, 2019, Zimbabwe’s central bank unveiled a foreign exchange trading system that effectively devalued the local currency which was officially pegged at parity with the US dollar.

The US dollar was worth 16 Zimbabwe dollars, on average, this week.

But in a decision that could see banks and other lenders losing millions, Supreme Court Chief Justice Luke Malaba said that “assets and liabilities, including… debts denominated in United States dollars immediately before the effective date of 22 February 2019” shall be valued in the local currency at a rate of “one-to-one”.